Self-Insurance Reserve Calculator

About this calculator

Rather than paying premiums to a commercial insurer, some businesses choose to self-insure a recurring, predictable risk — like a certain level of workers' compensation claims or equipment breakdowns — by setting aside their own reserve fund to cover losses as they happen. Sizing that reserve correctly means starting with the expected annual loss and adding a safety buffer on top, since actual losses in any given year will vary above and below the average.

This calculator takes your expected annual loss and a safety-margin percentage and returns the reserve fund you should hold to self-insure with confidence, rather than getting caught underfunded in a bad year. It's used by businesses and risk managers evaluating whether self-insurance is cheaper than buying commercial coverage, and by anyone who has already chosen to self-insure and needs to know how much liquidity to keep on hand.